Nutrition clubs, which are oriented toward dieters, may have become Herbalife Ltd.’s leading growth driver. But the company hasn’t abandoned another key element of its model: sports sponsorships and nutrition.
The downtown L.A.-based company has invested heavily in getting its name on team uniforms – from the Los Angeles Galaxy and FC Barcelona soccer clubs to India’s Saina Nehwal, the world’s No. 3 ranked badminton player.
But getting elite athletes to consume Herbalife products has been another matter. That challenge lead to this month’s launch of a line of performance nutrition shakes and supplements called Herbalife24.
Chief Executive Michael Johnson admits that trainers have complained that while many of the company’s energy and nutrition supplements were popular, most were formulated for pudgy middle-age men and women – not hard-training athletes.
“If they are wearing Herbalife on their chest, Herbalife products ought to be going into their bodies,” said Johnson, a competitive amateur cyclist. “What I wanted to do is create a full line of specialized products for professional athletes that our distributors could also sell to the normal weekend warriors.”
The line comprises seven shakes, drinks and supplements for consumption before, during and after training and competition. Individual products start at $30 for a month’s supply. The company has committed to having every batch independently tested for banned substances that could lead to an athlete being suspended from competition.
Herbalife tapped into the L.A. competitive-sports community to develop the line. Two cyclists that Johnson met at an event more than two years ago actually became part of the Herbalife24 development team.
Johnson said plans for a sports nutrition line were still largely in his head when he reached the top of the annual Piuma Hill Climb Challenge in Malibu and found two men distributing samples of their proprietary sports endurance drink. It was filled with replenishing electrolytes and energy-sustaining carbohydrates.
The drink had been formulated by one of the men, John Heiss, a UCLA biochemical doctoral candidate; the other, Heiss’ college roommate Casey Weaver, was running sales and marketing. The duo hoped eventually to build a successful company, but they ditched that idea and joined Herbalife, which based one product in the line, Prolong, on their formulation.
“It’s been quite an adventure,” said Heiss, now Herbalife’s director for sports and fitness, who has been traveling around the world with Weaver and Johnson to market the products to the company’s sponsored teams and individual athletes.
Analyst Per Ostlund at New York-based Jefferies & Co. believes that Herbalife24 can bring in customers who never would have considered the company’s products.
“It may never become as large as weight loss, but sports nutrition should become a good business for them once distributors get excited about the products and start selling them to the school team coaches and personal trainers they know in their circle,” he said.
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